Prepare A Statement of Cash Flows (Indirect Method)
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Biven Corporation's balance sheet and income statement appear below:
Comparative Balance Sheet
Ending Balance Beginning Balance
Assets:
Cash and cash equivalents............................ $ 35 $ 30
Accounts receivable..................................... 54 49
Inventory..................................................... 67 58
Plant and equipment..................................... 580 530
Accumulated depreciation............................ ( 316) ( 313)
Total assets................................................. $420 $354
Liabilities and stockholders' equity:
Accounts payable........................................ $ 51 $ 57
Wages payable............................................ 26 24
Taxes payable............................................. 11 10
Bonds payable............................................. 77 90
Deferred taxes............................................. 25 24
Common stock............................................ 33 30
Retained earnings......................................... 197 119
Total liabilities and stockholders' equity........ $420 $354
Income Statement
Sales........................................................... $620
Cost of goods sold...................................... 381
Gross margin............................................... 239
Selling and administrative expense................ 103
Net operating income................................... 136
Gain on sale of plant and equipment............. 20
Income before taxes.................................... 156
Income taxes............................................... 47
Net income.................................................. $109
Cash dividends were $31. The company sold equipment for $20 that was originally purchased for $14 and that had accumulated depreciation of $14.
Required:
Prepare a statement of cash flows for the year using the indirect method.
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Solution Summary
Given a set of facts, this solution illustrates the preparation of a statement of cash flows using the indirect method using a Word document.
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Biven Corporation's balance sheet and income statement appear below:
Comparative Balance Sheet
Ending Balance Beginning Balance
Assets:
Cash and cash equivalents............................ $ 35 $ 30
Accounts receivable..................................... 54 49
Inventory..................................................... 67 58
Plant and equipment..................................... 580 530
Accumulated depreciation............................ ( 316) ( 313)
Total assets................................................. $420 $354
Liabilities and stockholders' equity:
Accounts payable........................................ $ 51 $ 57
Wages payable............................................ 26 24
Taxes ...
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